Corporate social responsibility
Lecture 1: Definition and meaning
1. What is the purpose of business
• The social responsibility of business is to increase its profits
1.1. Purpose of the business:
• Economic theory point of view: profit maximisation argument
o Idea: is basically that business are looking at demand side and
consumers
o Framework of law / justice
• Various scandals that tried to maximised profit and went bankrupt
o Lernhault and Hauspie: show on books sales and profits when you
don’t have good growth of consumers and income – they created fake
organisation and took those into account
• Assumption well performing in the frame those cases mean that the market
mechanism aren’t perfect
o Objective of organisation
o Government objectives / laws
1.2. The importance of dynamics:
TINEKE VAN SIGHEM – CSR 1
,• Thinking about ethics and don’t harm others
• Stock exchange:
o Need a prospectus
o Quote a % of the share variate from 1% to 100%
o Need to have some liquidity
▪ Best 40% on the stock exchange
▪ Reference shareholder between 15 to 20%
➢ Reference shareholder who leads the strategy
o Need to report on quarterly basis
▪ When companies want to use investments from individuals that
they should be protected
➢ As a company as sophisticated because they’re on the
stock exchange
➢ Whereas individuals small amounts so the companies
need to explain strategy, strength, weaknesses,
challenges, risk
➢ Important movements of the sector
o Basically looking what analyst are telling us and the
easing thinks like selling and profit
o Huge level of sentiment
▪ Reporting of companies: sentiment are taking over: companies
want to show that they are doing well
➢ Pressure on organisation: good type of communication
each 3 months
• Family business that aren’t stock exchange quoted
o See the name of the family
o Strategic view: don’t have the obligation to report each 3 months
▪ Don’t see the timeline
▪ Example of Belgian entrepreneurs: like to think the impact in 5 or
10 years: what will it do to the next generation of the business
Are different dynamics: stock short term
• Depends on the dynamics and the values they have
• If you have short term view versus the long term
o Long term is more likely healthy
TINEKE VAN SIGHEM – CSR 2
,1.2.1. Multinationals versus SME
• Does an organisation needs sufficient resources (profitable) to be
responsible?
o Don’t make profit so put toxic cheap products in the food, treat working
people like slaves
• It leads to perverse type of thinking
o As an organisation you chose to do responsible you have to do it all the
time
• Point: it’s a choice; are organisations that aren’t ethical
o If you want to be responsible then you have to act all the time
responsible (even if the organisation can’t make profits)
• Small and big organisations differences on the impact, number of resources
• Reporting and explaining
o In small organisations more pressure
▪ More involved in the environment they operate
o Big organisations isn’t that easy
• Consistency is something very important
1.2.2. Contested versus social enterprises
• Contested: like bear (ABInbev, McDonalds, Coke)
o Impact on health, important measure of resources like develop systems
to reduce trash
▪ Business is questionable but they take important measurements
• Responsibility of the organisation and consumers
• Balance strategy and try to improve
• Privat versus public organisations
• Public are in definition responsible
o Won’t earn that much
• Public is created for society
o Privat: doesn’t mean you don’t consider society
Various dynamics around
2. The theory on CSR
• Social issues problems
• Stakeholders’ interest
o Concept is overwhelming taking in account various stakeholders and
nature now we are against child labour, but wasn’t the case 100
years ago
▪ Not all around the world against child labour: because
sometimes no school means no food for the family and results in
problems
TINEKE VAN SIGHEM – CSR 3
, o We all understand what responsibility is, but it depends where we are
and the meaning is detached to.
▪ The priority and focus is on different things.
➢ If there are certain issue then people will priorities.
So the context is very important, what is the level of economic
development, are there other parties doing, are they thinking in terms of
CSR.
o Becomes more complex, for multinational is difficult because there
activities in different parties of the world with different interest of
stakeholders.
• Carroll (1979)
o Economic
o Legal
o Ethical
o Discretionary
• Critical to
o Neoclassical economic approach of profit maximisation
o Public policy executed by government only
▪ Advocate social good
▪ Prevent from social harm
• “The term CSR is a brilliant one; it means something, but not always the
same thing, to everybody. … Even the antonyms, socially "irresponsible" and
"non-responsible," are subject to multiple interpretations.”
• Problems with definitions of CSR
o What everyone thinks: don’t harm, think about the social goal
o BUT:
▪ To many definition and they mean the same thing
➢ Important to look at the long term contribution and quality
o Thanks to definitions people understand different things
3. Dimensions of CSR definitions (Dahlsrud)
• Some confusion about how CSR is defined
o In this paper developed five dimensions
• Often biased toward specific interest and thus prevent the development and
implementation of the concept
o The claimed biases aren’t supported by empirical evidence
The definitional confusion surrounding CSR might potentially be a
significant problem
o If competing definitions have diverging biases people will talk about
CSR in a different way and thus prevent productive engagements
TINEKE VAN SIGHEM – CSR 4
, • What are different dimensions used in CSR
o Environmental
o Social
o Economic
o Stakeholder
o Voluntariness dimension
▪ Tricky situation, EU-union, business organisations like to have
the list very explicit but in reality is something different
➢ Most important actions for CSR is coming from federal
government
➢ Europe doing well except here
▪ Government provide image where business have to be going,
stimulated innovation and creativity
• When you look at different dimensions
o Europe regulated on environmental impact
Look at various definitions to understand what CSR is
o Stress upon the fact that CSR also an investment: in people, intention,
time are very much involved. In strategic part: sometimes positive
impact on the company sometimes not but you will always invest
4. What is CSR?
• A concept whereby companies integrate European social and environmental
concerns their business operations and in their interaction with their
stakeholders on a voluntary basis” (European Commission, 2001)
• “The responsibility of enterprises for their impacts on society” (European
Commission, 2011)
TINEKE VAN SIGHEM – CSR 5
Lecture 1: Definition and meaning
1. What is the purpose of business
• The social responsibility of business is to increase its profits
1.1. Purpose of the business:
• Economic theory point of view: profit maximisation argument
o Idea: is basically that business are looking at demand side and
consumers
o Framework of law / justice
• Various scandals that tried to maximised profit and went bankrupt
o Lernhault and Hauspie: show on books sales and profits when you
don’t have good growth of consumers and income – they created fake
organisation and took those into account
• Assumption well performing in the frame those cases mean that the market
mechanism aren’t perfect
o Objective of organisation
o Government objectives / laws
1.2. The importance of dynamics:
TINEKE VAN SIGHEM – CSR 1
,• Thinking about ethics and don’t harm others
• Stock exchange:
o Need a prospectus
o Quote a % of the share variate from 1% to 100%
o Need to have some liquidity
▪ Best 40% on the stock exchange
▪ Reference shareholder between 15 to 20%
➢ Reference shareholder who leads the strategy
o Need to report on quarterly basis
▪ When companies want to use investments from individuals that
they should be protected
➢ As a company as sophisticated because they’re on the
stock exchange
➢ Whereas individuals small amounts so the companies
need to explain strategy, strength, weaknesses,
challenges, risk
➢ Important movements of the sector
o Basically looking what analyst are telling us and the
easing thinks like selling and profit
o Huge level of sentiment
▪ Reporting of companies: sentiment are taking over: companies
want to show that they are doing well
➢ Pressure on organisation: good type of communication
each 3 months
• Family business that aren’t stock exchange quoted
o See the name of the family
o Strategic view: don’t have the obligation to report each 3 months
▪ Don’t see the timeline
▪ Example of Belgian entrepreneurs: like to think the impact in 5 or
10 years: what will it do to the next generation of the business
Are different dynamics: stock short term
• Depends on the dynamics and the values they have
• If you have short term view versus the long term
o Long term is more likely healthy
TINEKE VAN SIGHEM – CSR 2
,1.2.1. Multinationals versus SME
• Does an organisation needs sufficient resources (profitable) to be
responsible?
o Don’t make profit so put toxic cheap products in the food, treat working
people like slaves
• It leads to perverse type of thinking
o As an organisation you chose to do responsible you have to do it all the
time
• Point: it’s a choice; are organisations that aren’t ethical
o If you want to be responsible then you have to act all the time
responsible (even if the organisation can’t make profits)
• Small and big organisations differences on the impact, number of resources
• Reporting and explaining
o In small organisations more pressure
▪ More involved in the environment they operate
o Big organisations isn’t that easy
• Consistency is something very important
1.2.2. Contested versus social enterprises
• Contested: like bear (ABInbev, McDonalds, Coke)
o Impact on health, important measure of resources like develop systems
to reduce trash
▪ Business is questionable but they take important measurements
• Responsibility of the organisation and consumers
• Balance strategy and try to improve
• Privat versus public organisations
• Public are in definition responsible
o Won’t earn that much
• Public is created for society
o Privat: doesn’t mean you don’t consider society
Various dynamics around
2. The theory on CSR
• Social issues problems
• Stakeholders’ interest
o Concept is overwhelming taking in account various stakeholders and
nature now we are against child labour, but wasn’t the case 100
years ago
▪ Not all around the world against child labour: because
sometimes no school means no food for the family and results in
problems
TINEKE VAN SIGHEM – CSR 3
, o We all understand what responsibility is, but it depends where we are
and the meaning is detached to.
▪ The priority and focus is on different things.
➢ If there are certain issue then people will priorities.
So the context is very important, what is the level of economic
development, are there other parties doing, are they thinking in terms of
CSR.
o Becomes more complex, for multinational is difficult because there
activities in different parties of the world with different interest of
stakeholders.
• Carroll (1979)
o Economic
o Legal
o Ethical
o Discretionary
• Critical to
o Neoclassical economic approach of profit maximisation
o Public policy executed by government only
▪ Advocate social good
▪ Prevent from social harm
• “The term CSR is a brilliant one; it means something, but not always the
same thing, to everybody. … Even the antonyms, socially "irresponsible" and
"non-responsible," are subject to multiple interpretations.”
• Problems with definitions of CSR
o What everyone thinks: don’t harm, think about the social goal
o BUT:
▪ To many definition and they mean the same thing
➢ Important to look at the long term contribution and quality
o Thanks to definitions people understand different things
3. Dimensions of CSR definitions (Dahlsrud)
• Some confusion about how CSR is defined
o In this paper developed five dimensions
• Often biased toward specific interest and thus prevent the development and
implementation of the concept
o The claimed biases aren’t supported by empirical evidence
The definitional confusion surrounding CSR might potentially be a
significant problem
o If competing definitions have diverging biases people will talk about
CSR in a different way and thus prevent productive engagements
TINEKE VAN SIGHEM – CSR 4
, • What are different dimensions used in CSR
o Environmental
o Social
o Economic
o Stakeholder
o Voluntariness dimension
▪ Tricky situation, EU-union, business organisations like to have
the list very explicit but in reality is something different
➢ Most important actions for CSR is coming from federal
government
➢ Europe doing well except here
▪ Government provide image where business have to be going,
stimulated innovation and creativity
• When you look at different dimensions
o Europe regulated on environmental impact
Look at various definitions to understand what CSR is
o Stress upon the fact that CSR also an investment: in people, intention,
time are very much involved. In strategic part: sometimes positive
impact on the company sometimes not but you will always invest
4. What is CSR?
• A concept whereby companies integrate European social and environmental
concerns their business operations and in their interaction with their
stakeholders on a voluntary basis” (European Commission, 2001)
• “The responsibility of enterprises for their impacts on society” (European
Commission, 2011)
TINEKE VAN SIGHEM – CSR 5
